“How can I help my child buy a home?” I hear that question more than you might think. Sometimes it comes from parents, sometimes grandparents, and sometimes from family members who simply want to give someone they love a stronger start. It is a thoughtful question, but it is not always a simple one. With higher prices, upfront costs, and limited inventory, many young adults are finding that the first step into homeownership takes more planning than expected. A Consumer Guide from the National Association of REALTORS® (NAR) offers helpful guidance for families who are considering financial support and want to understand the details before they jump in.
The share of first-time buyers is down. First-time buyers made up just 21% of all purchases between July 2024 and June 2025, according to the NAR Profile of Home Buyers and Sellers. This is the lowest share of the market since NAR began tracking in 1981. Saving for the down payment remains the biggest hurdle.
Many parents want to help. Nearly three-quarters of parents with kids still at home say they are either already saving or planning to help their children buy a home someday, according to the 2026 Planning & Progress Study by Northwestern Mutual. Among Gen Z respondents, 44% expect parental assistance, compared with 16% of millennials and 12% of Gen Xers. Help can come in many forms, including gifting the down payment; funding the escrow or earnest money payment; cosigning; covering an escalation clause (which may be part of the offer in a competitive-bid situation); helping with seller closing costs, broker compensation or inspection costs; or buying the home outright.
Buyers should understand the upfront and ongoing expenses of homeownership. Beyond the down payment, buyers spent an average of $31,502 on upfront homebuying expenses, according to a 2026 survey of 1,000 recent home buyers by Clever Real Estate and Best Interest Financial. That’s almost four times the $8,083 they expected to pay. The expenses included repairs/improvements in the first year ($15,073), concessions to the seller ($7,678), closing costs ($5,719) and moving costs ($3,032). When it comes to ongoing expenses, encourage your family member to make a budget that includes:
• Private mortgage insurance (PMI) for buyers putting down less than 20% of the purchase price
• Homeowners insurance and potentially flood insurance
• Property taxes
• Homeowners association (HOA) dues
• Utilities
• Repairs
• Furnishings
• Cash reserve for unexpected expenses
Before helping a family member with a home purchase, set expectations about what you can and can’t do. Ask yourself these questions:
• Is this family member ready for the responsibilities of homeownership? Does the person have enough income and reserves to handle other expenses that come with homeownership?
• Do you have enough to be able to financially help? If you are dipping into your own reserves or retirement accounts, be sure you aren’t jeopardizing your own retirement.
• Are you offering a gift or a loan? If it’s a loan, the lender will factor it into your family member’s debt when underwriting the loan. If it’s a gift, your family member will need to document the source of the funds using a gift letter and bank statements.
• Do you expect some control over the home purchase in exchange for your financial support? If so, talk it through with your family member in advance to avoid any potential conflict.
• Have you set clear parameters? Be aware of reporting requirements, tax implications or potential financial implications (in the case of cosigning, that includes the impact on your credit and liability in the case of a default). Be sure to consult with a financial or tax advisor and attorney in advance. Then put the agreement in writing so there are no surprises.
Helping family members with a home purchase can be a wonderful gift, starting them on the path to building wealth through home equity. But be sure to go in with a mutual understanding of each party’s contributions and responsibilities.
Family conversations about homeownership can be exciting, emotional, and sometimes a little complicated. That is why it helps to slow down, ask good questions, and bring trusted professionals into the conversation early. A REALTOR® can help families understand the buying process, connect the dots from this consumer guide to the local market, and set up a personalized home search portal based on the buyer’s unique criteria. This way, they will receive real-time updates when new homes come on the market. To begin exploring available homes, visit gcar.net and click “Find a Home,” then connect with a localREALTOR® to help turn that search into a clear plan. #That'sWhoWeR
Greater Chattanooga REALTORS® is The Voice of Real Estate in Greater Chattanooga. A regional organization with nearly 3,000 members, Greater Chattanooga Realtors is one of some 1,200 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors service Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, visit www.gcar.net or call 423.698.8001